How to Write a Business Plan

Choose a Format First

The SBA describes two common approaches to a business plan, and the right one depends on whether you'll show it to a lender or investor. A traditional business plan is detailed, commonly dozens of pages, and is the format lenders and investors typically expect. A lean format fits the essentials on a single page and can be drafted in as little as an hour, which works well for a straightforward business that mainly needs the exercise of thinking through its own plan rather than a document to hand to a bank.

The Traditional Format's Nine Sections

The SBA's traditional format covers:

• Executive summary: a brief statement of what your company is and why it will succeed, usually written last even though it appears first.
• Company description: the problem you solve and your competitive advantage.
• Market analysis: your industry outlook and what your research found about competitors.
• Organization and management: your legal structure and leadership team.
• Service or product line: what you sell and the benefit it provides customers.
• Marketing and sales: how you'll reach and keep customers.
• Funding request: how much capital you need and on what terms, only if you're seeking financing.
• Financial projections: revenue forecasts and financial statements, typically for the next three to five years.
• Appendix: supporting documents like resumes, permits, or product images.

The Lean Format's Nine Blocks

The SBA's lean format is built around nine shorter elements instead: key partnerships, key activities, key resources, your value proposition, customer relationships, customer segments, channels, cost structure, and revenue streams. Rather than full paragraphs, each block is a few bullet points, which is why the whole plan can fit on one page.

Write the Market Analysis Section With Real Research

Whichever format you choose, the market analysis section is only as useful as the research behind it. See how to research your competitors and how to identify your target customer for how to gather that information before you write this section.

Build the Financial Projections From Your Cost Estimate

Your financial projections section is more credible when it's built from an actual cost estimate rather than a rough guess. See how to calculate startup costs for the SBA's approach to listing one-time and ongoing costs, which feeds directly into this section.

Tailor the Plan to Your Audience

A plan written for your own internal clarity can stay informal and skip sections that don't apply, like the funding request. A plan going to a bank or an investor should follow the traditional format closely, since lenders and investors compare your plan's structure against what they're used to reviewing, and a missing standard section can read as an oversight rather than a deliberate choice.

Revisit the Plan as the Business Changes

A business plan is not a one-time document. Update your market analysis, financial projections, and funding request as your business operates and actual numbers replace estimates, since a stale plan is less useful for decisions and less convincing if you show it to a lender or investor later.

Write the Executive Summary Last

Even though it appears first, the executive summary is easiest to write after every other section is finished, since it's a condensed version of everything that follows rather than a separate exercise.

Don't Pad Length to Look More Serious

A concise, accurate plan reads better to a lender or investor than a long one padded with filler. Match the depth of each section to what the decision actually requires, not to a page count you assume looks more professional.

Keep Financial Projections Realistic

Overly optimistic revenue projections are a common reason a lender or investor questions the rest of a plan. Build projections from the cost and market research you actually did, and be ready to explain the assumptions behind every number.

A Lean Plan Can Still Become a Traditional One

If you start with a lean, one-page plan and later decide to seek a loan or investors, you can expand it into the traditional format using the same research, rather than starting over from scratch.

This Is Not Financial or Legal Advice

A business plan is a planning and communication tool, not a legal or tax document. If your plan involves specific tax elections, a particular legal structure, or outside investment, talk to a tax professional or attorney about those pieces separately.